Statement of Cash Flows-Indirect Method The comparative balance sheet of Whitman

ID: 2489788 • Letter: S

Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Whitman Co. at December 31, 2014 and 2013, is as follows: Dec. 31,2014 Dec. 31, 2013 Assets 918,000 964,800 761,940 1,268,460 ,162,980 35,100 479,700 900,900 (408,600) (382,320) 454,680 Cash 828,900 Inventories Prepaid expenses … … 29,340 315,900 1.462,500 Buildings.... 512,280 $4,785,480 4,219,020 Liabilities and Stockholders'Equity Common stock, $25 par Paid-in capital: Excess of issue price over par-common stock..... 270,000 317,000 758,000 117,000 558,000 2,517,980 2,585,700 4,785,480 $4,219020 $4785480 4219,020 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 2014 are as follows ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debi Credit 2014 Jan. Apr 20 Realized $151,200 cash 1 Balance 479,700 from sale 163,800315,900

Explanation / Answer

Whiteman Co.

Statement of Cash Flows

For the year ended December 31,2014

Cash flow from operating activities

Net Income/(loss)

-$35,320

Adjustments to reconcile net loss to net cash flow from operating activities

Depreciation for the year

($26,280 + $29,340)

$55,620

Loss on sale of Land

($163,800 - $151,200)

$12,600

Changes in current operating assets and liabilities

Increase in accounts receivables

-$66,960

Increase in inventories

-$1,05,480

Decrease in prepaid expenses

$5,760

Decrease in accounts payable

-$35,820

Net cash flow from operating activities

-$1,69,600

Cash flow from investing activities

Cash received from sale of land

$1,51,200

Cash paid for purchase of building

-$5,61,600

Cash paid for purchase of equipment

-$1,04,400

Net cash flow from investing activities

-$5,14,800

Cash flow from financing activities

Cash received from issue of Bonds

$2,70,000

Cash received from issue of Common stock shares

$4,00,000

Dividend paid

-$32,400

Net cash flow from financing activities

$6,37,600

Net cash flow

-$46,800

Cash att the beginning of the year

$9,64,800

Cash at the end of the year

$9,18,000